(The Center Square) – An Illinois legislator is moving to repeal the state’s recently-passed digital asset tax.
State Rep. John Cabello, R-Machesney Park, filed House Bill 5798 on Monday.
“There’s a lot of constituents and other folks that have interests that think this is going to raise revenue and tax them around $60 million or more,” Cabello told The Center Square.
The revenue package signed by Gov. J.B. Pritzker last week includes a 0.2% tax on the value of digital assets held or transacted by Illinois residents.
Peter Van Valkenburgh, executive director of Coin Center, said there are huge uncertainties about the tax for normal people in Illinois.
“Even just moving your digital assets from one wallet that you control to another because you want to have control of your finances instead of trusting a bank, even that might be a taxable event under this bill, which is kind of nuts,” Van Valkenburgh told The Center Square.
Both Cabello and Van Valkenburgh said it was not clear which transactions would be taxed.
“Is it any business transferring a digital asset on behalf of a customer? We’ve got a restaurant here in Machesney Park called Steak and Shake that takes cryptocurrency. Does it count for that?”
The revenue package signed last week also includes a social media platform fee that was proposed by the governor.
“These predatory social media platforms that collect all our data and monetize it, a technological solution to that is peer-to-peer transactions on crypto,” Van Valkenburgh said.
Van Valkenburgh said taxing big tech would be better than imposing a tax on peer-to-peer transactions.
“We think it’s an inappropriate tax. It’s going to drive a lot of potential consumer beneficial innovation out of Illinois,” Van Valkenburgh said.
The Crypto Council for Innovation said Illinois’ digital asset tax would be the most punitive in the country.
“So the Trump administration is moving crypto, Bitcoin, all that stuff forward, and J.B. Pritzker has to be against it, so this is his answer of doing everything opposite of what the president is doing,” Cabello said.
The Machesney Park Republican expressed concern that the tax would be handled by the Illinois Department of Revenue instead of the Department of Financial and Professional Regulation.
Cabello’s HB 5798 would immediately repeal the tax, which is scheduled to take effect along with other state revenue measures on July 1.